NAFTA versus Bilateral Trade

NAFTA may be too complex to save given the different economic, wage and social structures of Canada the United States and Mexico.  We might simply take the existing agreement and break it down into the sections dealing with each country’s trade, dividing it into six bilateral agreements.  Each of the three countries to make an agreement with the other two, following the same wording and intent from the relevant portions of the existing NAFTA agreement.  Then negotiate.

Regardless, the Trump Administration seems determined to rip up the NAFTA agreement and start a trade war based on their arbitrary tariffs on the Canadian softwood industry last spring, and the blatantly ridiculous 300% tariff on Canada’s one remaining aviation company. The United States has complained several times over the past decade on softwood lumber and each time arbitration has sided with Canada.  Canada says they will retaliate in-kind, however similar dollar sanctions to the U.S. is almost meaningless as Canada’s economy is only one-tenth the size of the U.S. economy.  Canada must do more to be heard.

Boeing aviation complained to the International Trade Commission, part of the U.S. Commerce Department  that they believed Bombardier was selling CS-100 planes to Delta Airlines below cost, and asked for a tariff of approximately 75%.  The Commerce department without evidence or justification implemented a 300% tariff on the airplane, jeopardizing the entire Canadian Aviation Industry. It is interesting to note that Boeing was trying to sell used Brazilian E190 aircraft to Delta, which they had earlier taken in trade on the sale of Boeing jets to Air Canada. What irony?

Bottom line is that Boeing cannot claim being injured at all, as they do not manufacture a 100 to 110 seat aircraft.  The closest size jet that Boeing produced was the 717, and they ended production of that aircraft 10 years ago.  Delta has a right to buy any new jet they want, and any similarity to a used aircraft of another manufacturer is not even imaginable.

This shows clearly what the Trump Administration is trying to do to Canada. This is no longer Boeing versus Bombardier, it is the whole Canadian Aviation Industry.  See the earlier Post; “United States attacks Canadian Aviation Industry with 300% tariff”, to see how Canada was manipulated to scrap the AVRO Arrow fighter aircraft in the late 1950’s, which virtually wiped out an industry. Canada must respond.


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